"Australia and Indonesia, we both are countries that have become victims," he said.

"We've been victims of this act of people smuggling. Many citizens arrive from other countries and give us burden.

"They give us social burden. They give us economic burden.

"When some continue their journey to Australia, that brings more burden.

"Together, Australia and Indonesia can overcome this issue and the solution lies in cooperation."

That message was echoed by Dewi Fortuna Anwar, a senior foreign affairs adviser to Indonesian vice-president Boediono, who told Lateline that talks about asylum seekers must have an emphasis on partnership.

"As [Mr Yudhoyono] has said during the meeting with Prime Minister Abbott, both Indonesia and Australia are victims in this," she said.

"We should work through this process together, bilaterally, and also using the existing mechanism, the Bali process, in which the sending countries, the transit countries and the receiving countries sit down together.

"I don't think we will really be able to patch the leaks ... if we do not deal with the the problems of these illegal migrants at the sending point as well."

But she had little enthusiasm for the Australian Government's plan to buy boats from Indonesian fishermen.

"If you buy those leaky boats then those fishermen will have money probably to buy more boats, so I'm not sure that it will really solve the problems," she said.

Mr Abbott said Australia's most "important overall relationship" is with Indonesia, but said "there's plenty of room to improve" the economic partnership.

"From Australia's perspective there should be an urgency - a real urgency - to building this relationship while there's still so much that Australia has to give and that Indonesia is keen to receive," he said.

He pointed to the escalation in demand for beef in Indonesia as an area for potential major trade growth.

"This is a chance here for each of us to play to our strengths," he said.

"Indonesia: an acknowledged world leader in fattening and finishing, with some of the world's finest intensive feedlots.

"We can and should work together - but it will take some effort, especially after the shock of the former Australian government's cancelling the live cattle export trade in panic at a television program.

"Nothing like this can ever be allowed to happen again."

In 2011, the Labor government banned live cattle exports to Indonesia following a Four Corners investigation that exposed cases of animal cruelty and abuse at 12 Indonesian abattoirs.

Mr Bowen says Mr Abbott should deal with the problems he has created instead of apologising for the previous government's actions.

"He and his foreign minister have managed to threaten our most important bilateral relationship in their first week in office, so he should be more focused on fixing that problem," Mr Bowen told AM this morning.

"They have gone for the cheap sound bites in opposition, they've gone for the quick and easy slogans which might have sounded easy in opposition, but which were always going to lead to this outcome in government.

"Very clearly it's proving a lot more difficult in office than it was in opposition."

Mr Abbott says he is in favour of Indonesian investment in Australian agriculture, following reports Indonesia is looking to buy a million hectares of grazing land in northern Australia.

"I also welcome Indonesia's desire to invest in Australia - including in agriculture," he said.

"We are open to investments that will hep to build the prosperity of both nations."

He reassured the gathering that his Government's approach to Indonesia would be "very, very straightforward".

"We will take a respectful, consultative, no-surprises approach," he said.

This is Mr Abbott's first overseas trip as Prime Minister.

He and wife Margie received a full ceremonial welcome, including a 19-gun salute, when they arrived in Jakarta yesterday afternoon.

They later stopped off at Jakarta's Kalibata war ceremony to lay a wreath, before heading to the presidential palace.